UK challenger Starling Bank is reportedly in the early stages of raising £80 million in new funding as it rounds out its business banking offering and competes for a £120 million grant from the RBS bail-out fund.
According to TechCrunch, Starling is in the process of hiring an international advisory firm with a view to tapping up large institutional investors for the capital raise. The app-based banking startup has so far been funded solely by hedge fund manager Harold McPike, who is understood to own 50% of the bank.
The move to expand its funding base comes as the bank prepares for the roll out of its business banking account, embarking on a "double-digit" hiring spree and a search for a new head of SME banking.
TechCrunch also confirmed the souring of its much-trumpeted partnership with money transfer firm TransferWise, as both companies begin to tread similar territory.
Starling's Anne Boden told TechCrunch: “Our partnership with TransferWise was always about meeting customer demands. As we developed out our payments business it became clear to us that integrating with a third party payments provider in the Starling Marketplace didn’t offer the best customer experience. We figured that we could provide a better user experience by doing it ourselves."